Many journalists can't provide the value-added journalism that is needed today

Journalists pretend they spend their time investigating the intricacies of international affairs, covering the inner workings of the economic system, and exposing abuses of political and economic power. Although many aspire to do so (and occasionally do with great effect), the reality is far from the imagined sense of self.

Most journalists spend the majority of their time reporting what a mayor said in a prepared statement, writing stories about how parents can save money for university tuition, covering the release of the latest versions of popular electronic devices, or finding out if a sports figure’s injury will affect performance in the next match.

Most cover news in a fairly formulaic way, reformatting information released by others: the agenda for the next town council meeting, the half dozen most interesting items from the daily police reports, what performances will take place this weekend, and the quarterly financial results of a local employer. These standard stories are merely aggregations of information supplied by others.

At one time these standard stories served useful purposes because newspapers were the primary information hubs of the community. Today such routine information has little economic value because the original providers are now directly feeding that information to the interested public through their own websites, blogs, and Twitter feeds. Additionally, specialist topic digital operators are now aggregating and organizing that information for easy accessibility.

Town councils place their agendas and voting reports on their own websites, many police and fire departments operate continuously updated blogs and twitter feeds that provide basic emergency reports and what is being entered in their blotters and logs, performance centers and concert promoters offer websites and digital notifications of upcoming activities and events, and companies and business information media offer direct distribution of financial reports and news releases to the public. All of these are stripping the value from newspaper redistribution of those kinds of information and making people less willing to pay for provision of that news.

To survive, news organizations need to move away from information that is readily available elsewhere; they need to use journalists’ time to seek out the kinds of information less available and to spend time writing stories that put events into context, explain how and why they happened, and prepare the public for future developments.  These value-added journalism approaches are critical to the economic future of news organizations and journalists themselves.

Unfortunately, many journalists do not evidence the skills, critical analytical capacity, or inclination to carry out value-added journalism. News organizations have to start asking themselves whether it is because are hiring the wrong journalists or whether their company practices are inhibiting journalists’ abilities to do so.

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Changing frequency of newspaper publication is not a sign of the apocalypse

The number of newspapers that have reduced their publication frequency in response to market changes and economic conditions continues to rise.

This year the Times-Herald in Newnan, Georgia shifted from 7 days a week to 5 days per week. The New Orleans Times-Picayune moved to 3-day per week schedule, as has The Patriot-News in Harrisburg, Pa., and many papers in the Advance Publications group.

In doing so, the papers are bolstering their digital publications and producing in physical form only on days that most interest retail advertisers. From the financial standpoint, these moves make a great deal of sense.

Reactions to the changes have ranged from disbelief to resignation in the journalism community. Many have bemoaned the loss of dailies and argued non-dailies cannot possibly serve their communities as well. That argument is problematic, of course, because there have typically been 3-4 times more weeklies than dailies in the U.S. and many have done far better jobs covering towns and neighbourhoods than dailies.

The assumption that 7-day per week publication is, and has been, the norm is another example of ahistorical and baseless views spread about the industry these days. In 1950 less than one-third of newspapers (549 papers) published a Sunday edition and the number with Sunday editions peaked at 917 in 2000, being published by just two-thirds of all papers. Saturday editions were not the norm until well after mid-twentieth century. The appearance of high frequency daily publication was fueled by the demands of advertisers.

If one considers the definitions of daily publication one finds that it is nowhere near 7 days per week. The internationally accepted definition of a daily newspaper is a paper published only 4 days per week.

This is not to say that the industry is without problems. The changes in publication frequency do reveal how the inordinate dependence on advertising revenue has shaped the industry and how wealth continues to be stripped from newspapers.

The changing frequency should be seen as part of the evolutionary shift toward digital only publication--a shift that is occurring at a varying pace in different types of papers and markets. But it does not mean that journalism in print, in print and digital combinations, and in digital-only forms cannot serve community needs.

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Contemporary Trends Change Magazine and Newspaper Printing Markets

The markets of magazine and newspaper printing firms are undergoing significant changes, reflecting on-going transformations in the customers they serve.

Some of the changes have been under way for 2 decades with traditional printing companies morphing into printing service companies offering more profitable value-added services and products.  These included high-end specialized printing capabilities and services, database printing, and wide-ranging distribution services. At the same time, the increasing number of magazine titles, accompanied by lower average press runs, pushed the companies toward higher efficiency and acquisition of presses and systems designed for lower press runs.

In this environment, many printers could not effectively compete and consolidation began creating large regional players in the industry.

Shorter-term trends have also played havoc with the printing industry by killing off some magazine and newspaper titles, lowering the average number of pages printed because of advertising reductions, and by decreasing demand for catalog printing by mail order companies.

These changes created excess capacity and financial problems for many printers, opening the way for private equity firms to purchase trouble companies, restructure their operations, and consolidate the industry even further. Walstead Investments, for example, bought the St. Ives Group, Southern Print and Wyndeham in the UK to do just that.

About the only bright spot for the printing industry has been that many newspapers have now decided to outsource printing—increasing the number of customers in that segment for the short term, at least. Even some large newspapers that had given up commercial printing decades ago have changed the size capacity and flexibility of their presses to gain more production options and they are now offering printing services to other publishers and advertising service firms.

The consolidation has allowed big players to grow bigger. Donnelley has expanded by acquiring firms across North America.  Quad/Graphics has moved into Europe and Latin America. The German publisher Guner & Jahr acquired Brown Printing in the US and Prisma Presse in France.

The current economy is limiting the ability of these firms to push up prices, but one can expect that to occur when better times return and capacity utilization increases.

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Changing social power is reflected in the sales of newspaper offices

Newspapers across the US are shedding large downtown buildings in favor of more modest facilities, often away from the center of cities.

The downsizing is the consequence of reduced need for office space following staff cuts, changes in production technologies that reduce space requirements, and the outsourcing many printing and distribution activities. Examples include:

• The Miami Herald has sold its bayfront building and the 14 acres around it for $236 million and is planning to relocate elsewhere next in 2013. It will use the proceeds to pay down debt and pension liabilities.

• The Ft. Worth Star-Telegram has sold its home for the past 90 years and will be moving to new offices this spring
 
• The Boulder Daily Camera in Boulder, CO, sold its downtown facilities for $9 million and is moving to facilities outside the center of town.

• The Tribune & Georgian in St. Mary’s, GA, shed its former building by donating it to United Way of Camden Country in February to be used for work space and a training resource center for charitable organizations. The paper no longer used the building because it had moved to other facilities after outsourcing its printing operations.

The changes are not just indicative of the changing financial and operational characteristics of newspapers, but of the position of newspapers as major institutions in society. Over the past 150 years, newspapers used the wealth they generated to construct buildings in the center of towns—sometimes monumental and architecturally significant edifices—that reflected their importance and power in the community and their location at the center of society.

Social, economic, and technology developments have stripped that wealth from the newspaper industry. But cities are also changing and many downtown areas are no longer the locus of economic and political power in communities. As we continue to move more firmly into the digital age, the physical manifestations of where the center of society is located will continue to change.

Changes in media and media industries reflect deeper social changes that will continue altering our lives in may ways for many years to come.

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Newspapers increase use of co-opetition practices

U.S. newspapers are increasing their use of co-opetition practices, that is, cooperating with competitors to reduce costs, create synergies, or reduce risk in new markets. Such activities are permissible if they are not designed to create cartels or control prices for advertising or circulation.

The latest example occurred this week when the Boston Herald announced an agreement with the Boston Globe for its competitor to print and deliver the Herald. The move creates cost savings for the Herald by allow it to cut printing, trucks, and delivery personnel, while simultaneously creating production and distribution economies and an additional revenue stream for the Globe--a win-win for both companies.

Such service agreements do not violate antitrust laws because the papers remain independent, set their own prices, and create their own content. If papers were to engage in such actions they would have to apply for an antitrust exemption under the Newspaper Preservation Act (see John C. Busterna and Robert G. Picard, Joint Operating Agreements: The Newspaper Preservation Act and its Application. Ablex, 1993), but those agreements have not proven successful in the long run.

The Boston agreement comes on the heels of numerous printing agreements, including that of the Chicago Tribune and Chicago Sun-Times, that have been made among publishers in the last couple of years.

Another example of co-opetition is seen in the 59 newspaper and information companies—including New York Times Co., McClatchy Co., Washington Post Co., E.W. Scripps Co., A.H. Belo, and Associated Press—that have now banded together to create NewsRight to track use of digital content and ease its licensing. By cooperating with each other, the companies have brought more than 800 content sites into the operation and created a significant player in the digital industry.

Daily newspaper companies have historically disliked cooperation unless it was absolutely necessary—as in the case of news services. The new types of cooperation emerging show that the preference to go it alone is being eroded by contemporary financial conditions and the difficulties of operating independently in the digital environment.

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Google, Newspaper Archives, and the Business of Cultural Heritage

Google announced this month that it is ending its ambitious project to digitally archive newspapers. The project to scan the archives of the nation’s newspapers and make them available online as a searchable historical record was announced in 2008 with the level of hubris only found in online enterprises.

"Our objective is to bring all the world's historical newspaper information online,” said Adam Smith, director of product management at Google, announcing the project. Those lofty aims were echoed by Punit Soni, manager of the newspaper initiative: “As we work with more and more publishers, we'll move closer towards our goal of making those billions of pages of newsprint from around the world searchable, discoverable, and accessible online…."Over time, as we scan more articles and our index grows, we'll also start blending these archives into our main search results so that when you search Google.com, you'll be searching the full text of these newspapers as well.”

After scanning about 60 million pages and beginning to make them available as full page shots--because costs of disaggregating and indexing were too high and copyright clearances were difficult to obtain for older material—the company announced that it will quit scanning pages, but continue offering the existing pages available on it Google News Archive site. It said it would not invest any new effort to improve indexing or add tools to better search and manage the archive.

The project may have been well-intentioned, but it was not well thought out. It was a free service designed to use the search traffic at the site to raise revenue through advertising Google would put on the site. The scale of the project was enormous and requiring finding, scanning, and indexing thousands of daily and weekly newspapers--many no longer in existence. It would require a long-term commitment of funds, personnel and server capacity to catalogue and scan the material and provide and maintain search functions. The project ultimately incorporated on a fraction of the papers it had hoped to scan, did so spottily in many cases, and its usability was poor because it never mastered the problems of handling so much content. Worse yet, it discovered that history was not a money making business.

The exit announcement is not a surprise and is another sign that players the virtual world are stopping deluding themselves that they are replacing the entire world and that the laws of economics and finance to not apply to them.

As laudable the preservation of newspaper archives might be, expecting it to be completed and maintained by a commercial firm defied sense and historical experience. For centuries, the most important historical records, books, art have been maintain in governmentally and charitably funded collections because commercial enterprises were either unwilling to bear the costs or to allow the large scale efforts required to preserve, catalogue, index, and make available cultural heritage materials distract them from their business activities.

Why would anyone expect Google to act otherwise?

As Google increasingly acts as a mature business it will increasingly shed activities that were launched as goodwill gestures because the costs of their operations reduces the company’s financial performance and will diminish the value of its stock compared to other tech firms. Over time it will be harder for the firm to maintain the stance that it is not self-interested and motivated only by the opportunities to improve the lives of the public by providing access to all the world’s information.

The tentacles of its operations that have reached out into to many fields will increasingly be pulled back if they do not yield financial results. And fears that Google will rule the world will diminish. Google, Microsoft, Amazon and other big players of the digital world all have limits, just as did the handful of firms that once controlled steel, oil, and shipping through cartels. At some point even mammoth, wealthy companies do not have the resources and capabilities to keep expanding endlessly and their performance declines, leading shareholders to rein them in and competitors to find opportunities.

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